Germany tackles a severe case of technophobia: Bonn is actively promoting and co-ordinating innovation, reports John Eisenhammer

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The Independent Online
THE COMPLAINT that so many good inventions have been lost to other countries which have marketed and grown rich on them has long been part of the British lament about national economic decline. Much more surprising is that Europe's most powerful economy, renowned for its engineering wizardry, should be echoing to a similar sad refrain.

Germany has been in the throes of a severe bout of techno-angst, worrying it is falling behind in the race for the innovations that will dominate the 21st century.

The country still leads with the best in sectors such as cars and mechanical engineering, but these risk being the smokestack industries of the future. As soon as Germans focus on the current buzzwords, such as information highways and bio-technology, the result is much nervous nail-biting.

Chancellor Helmut Kohl has railed against what he sees as his countrymen's unfriendliness towards technology, or at least deep scepticism. His Minister of Research and Technology, Paul Kruger, complains that Germans are losing out because of an unwillingness to take risks.

This Teutonic exercise in breast-beating is admirably captured in the book Can the Germans Still be Saved, by Lothar Spath, former prime minister of the state of Baden-Wuttemberg - the innovation heartland of German industry - and now chief executive of Jenoptik, and Herbert Henzler, head of McKinsey in Germany. The same complacency that led to German firms falling behind in management techniques and production efficiency has dulled the country's innovative edge, the book argues.

But just as the shock of the recession, and the severe weaknesses it exposed, have galvanised corporate Germany to remarkable feats of cost-cutting and restructuring, so too have they produced a technological awakening.

Industrial policy has suddenly acquired a new respectability as the government, its attention fixed firmly on the Japanese example, gets actively involved in directing, promoting and co-ordinating technological innovation. Special committees and groups - so-called clearing houses for innovation - have been springing up across the country at an extraordinary rate.

Mr Kohl has gathered together a grandly named Council for Research, Technology and Innovation for meetings at the chancellery, including such people as Heinrich von Pierer, the head of Siemens, Hermann Rappe, the boss of the IG Chemie trade union, and the directors of Germany's main research organisations, the Max- Planck and Fraunhofer institutes.

The aim is to identify the key areas of the future, to reduce wasteful duplication, and to bring together basic research, industrial application and state assistance in as efficient a manner as possible. The fact that the record of state backing for tomorrow's winners is a pretty miserable one has not deterred, such is the concern that Germany risks falling behind.

Jurgen Schrempp, the chief executive-elect of Daimler-Benz, and currently head of its Dasa aerospace subsidiary, has long called for an active German industrial policy in his field. 'The Japanese have declared aerospace a strategic industry. President Clinton has a dollars 20bn programme for the US aerospace industry. There is nothing like this here. What we need is a winning culture, the determination to make success,' he said last year in an interview with the Independent.

At the beginning of this month he achieved a first success, with the government's announcement it is backing a DM1.2bn ( pounds 494.11m) aid programme for civilian aircraft research, notably in the fields of engine efficiency and pollution reduction. Dasa welcomed this as a first step, while pointing out that the difference remains: millions in Germany, billions in the US.

There was also the announcement at the end of May by IBM, Bosch, Daimler-Benz and Siemens of a combined research project into chip production - the result of one of those brainstorming sessions in Bonn. In money terms the project is modest, but the fact that something is happening that would have been unthinkable not long ago is significant.

The occasional star-studded get- togethers at the chancellery are underpinned by a systematic approach at the Technology Ministry, where Mr Kruger has set up a series of Research and Innovation Circles, linking top civil servants, industry and the universities. These cover areas such as telecommunications, energy, transport, construction and the environment. Planners in the ministry talk of an entirely new innovation model, as projects are identified and co-ordination and funding arranged. 'In the past we often focused on grandiose technologies and rather lost sight of the market,' Mr Kruger said.

At a time of punishing budget constraints in Germany, the extra money available for backing specific projects is not great. But it is significant that the proposed budget for 1995 recently approved by the cabinet, while slashing expenditure elsewhere, was particularly generous to the Research and Technology Ministry.

Mr Kruger attributes the key to the Japanese success to their 'extraordinary readiness to co-operate'. His research and innovation circles are aimed at getting all the main German players round the same table. Similar thinking is driving the joint national campaign by the Confederation of German Industry and the Federation of Chambers of Commerce, which is organising seminars and meetings bringing together researchers and companies.

Launching this so-called 'innovation offensive' in the spring, Hans Peter Stihl, the head of the Chambers of Commerce, picked out the symptoms of Germany's techo-problem: declining patent registrations, an imbalance between too much pure research and too little applied research, and insufficient transformation into marketable products.

At the same ceremony, Chancellor Kohl focused on the example of genetic research, where tough regulations and obsessive bureaucracy, against a background of intense popular mistrust, have produced a technology-unfriendly environment, forcing the big German chemical firms to do their research abroad. While there are some 300 plants in the US for making genetically engineered products, and 130 in Japan, the number in Germany is just six.

It was as much as anything a determination to demonstrate that Germany is still able to take risks to hang on to the leading edge of technical innovation that tipped the government's hand this spring in backing the controversial magnetic hover train project. Overriding the objections of an independent panel of experts, worrying about the risks of another Concorde-style flop, the government gave the go-ahead for spending around DM10bn on the Transrapid link between Hamburg and Berlin. 'For me, the Transrapid is a symbol of Germany's new beginning in technology,' Mr Kruger enthused.

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